Demand for the greenbuck saw Uganda’s shilling weaken as importers sought the dollar to meet their obligations. The currency also lost ground due to less inflows from the agriculture sector even as energy and manufacturing sectors sought more dollars.
Reuter said commercial banks quoted the shilling at 3,400/3,410, weaker than Monday’s close of3,385/3,395. The shilling was last at this level on July 11.
A weak exchange rates makes imports expensive as one needs more shillings to purchase a dollar worth of goods compared to before. But is also good for exporters as their good become more affordable abroad.
East African countries are however hoping that the discovery of minerals will substantially cut back energy imports and strengthen their currencies putting them a on sure growth path if well managed.
A weak currency also makes it difficult for a nation to service her foreign debt and purchase essentials such as food and medicine.
